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Unformatted text preview: The Unemployment Rate is the ratio of the number of people who are unemployed to the number of people in the labor force: u= U/L Inflation affects the value of money, decreasing the efficacy of the money people save and owe. Selling bonds for investment purposes is not bad, but selling bonds and using the proceeds for pure consumption, thats bad, bad, bad. When the value of the dollar starts to rise, we import more goods, and net export goes down, causing employment to go down. C= C +MPC (Y-T) MPC+MPS=1 In a good year, MPC=.94 In bad years MPC can equal .98 out of every dollar. I= I dr Multiplier= 1/MPS= 1/(1-MPC)...
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- Spring '07